Stocks Continue To Sell-Off; Stock Market Breadth Shows More Weakness

Stocks Continue To Sell-Off; Stock Market Breadth Shows More Weakness

Sector rotation continues to play out and investors are punishing growth stocks, especially the tech stocks lower again today. Big Tech experienced heavy losses during the early hours of trading yesterday.

But, some of them recovered most of their losses towards the close. This was mainly because investors rushed to bag some bargains. There is no doubt that there were some real bargains in the market yesterday for instance, Tesla stock price dropped briefly below its 200-day SMA on the daily time frame. 

Asian Markets 

The Asian stock market also adopted a cautious approach today and risk-off was the dominant theme among investors. The Shanghai index declined 2.83%, the HSI index decreased by 3.43%, while the ASX index fell 0.90%. The Nikkei index dropped by 1.61%.

Dow Jones and S&P 500: Market Breadth

The Dow Jones‘ market breadth lost momentum yesterday. 77% of the Dow Jones stocks traded above their 200-day moving average. 

The S&P 500 stock breadth also lost its strength yesterday. 84% of the shares traded above their 200-day moving average. 

Dow Jones Futures Today

The Dow Jones futures are trading lower today. In terms of economic data, investors will continue to focus on Jerome Powell’s testimony. In addition to this, we also have the New Home Sales data due later in the day. The forecast for New Homes Sales is 853K.

The Dow Jones futures are trading lower today. The Dow has moved closer to its 20-day SMA on the daily time frame and this retracement in the price has happened after the price pierced the upper level of the Bollinger Band on the daily time frame.

The Bulls are still in control of the price as the price is trading above the 50-day, 100-day and 200-day SMA simple moving averages on the daily time frame, and as long as this remains intact, there is little to worry about. Moreover, the RSI has also started to pull away from its overbought area.  

The near term support is at 30,885, while the resistance is at 31,658.    

Stock Market Rally

The S&P 500 stock index closed higher yesterday; the index advanced by 0.13%. The energy sector led the index higher and 7 out of 11 sectors closed higher. 

The Dow index also moved higher yesterday; the Dow stocks moved the index higher by 0.09%. 16 shares advanced while 14 shares closed lower. 

The NASDAQ composite, a tech-savvy index, closed low by 0.50% yesterday.

S&P 500 Leaders and Laggards: Cimarex and Leidos Holdings

Cimarex Energy stock contributed the biggest gain, soaring 9.63%. Leidos Holdings stock was the largest drag; it fell by 9.91%. The S&P 500 stock index is up 0.8% so far this year.

Dow Jones Leaders and Laggards: Disney and Home Depot

Disney provided the biggest help for the Dow Jones; it advanced by 2.78%, while Home Depot was the largest decliner, it fell by 3.12%.